Revenue service Sars has urged social media influencers to declare their income for taxation.
Social media influencers use platforms such as Instagram, Facebook, TikTok and YouTube to promote a product or service. It's a form of social media marketing in which influencers are paid to endorse a brand, leveraging their following. They make money through various channels, including brand-sponsored content, featured products, adverts and other means.
Sars said it has realised that traditional marketing has digitised through social media, making influencers obliged to pay tax.
“Sars is generally finding that most marketing budgets are contracting social personalities to lend their image to digital platforms. This is a shift away from established marketing houses towards individuals with a sizeable following.
“As the marketing spend-mix changes in response to these shifts, Sars is also adapting its educational and compliance initiatives. Undeniably, digitisation and attendant economic activities have fundamentally changed the world of work, and the gig and sharing economies are critical in this respect.”
While social media influencing is not considered formal work, Sars says it is no different to other taxpayers who don't have consistent earnings, such as freelancers, but are still compliant.
“Though the social-influencer segment has its own nuances, it is no different to other taxpayer segments in that income earned must be disclosed and taxed. Freelance work is similar. Citizens working as social influencers are encouraged to declare income earned from brand collaboration, sponsored content and affiliate marketing, whether they have been paid in cash, in products or in services.”
It reiterated that social media influencers are legally obliged to declare their income.
“Full voluntary disclosure is critical. No matter how social influencers are remunerated — whether with products, services, or travel — all these are deemed as income and must be taxed accordingly.”
Sars's model for collections is organised into segments of taxpayers to serve different needs. This includes standard taxpayers (comprising taxpayers with a single income and simple returns); large and international businesses; high-wealth individuals; public benefit organisations; prominent and related entities; estates; tax practitioners; and employers.
It said it is expanding its segmentation model to include social media influencers, national and provincial governments, and the gig economy (gigs).
When managing the social media influencers segment, Sars said it will handle each situation case-by-case according to the current income tax bracket, with some of the cases falling into the provisional taxpayer category.
Sars commissioner Edward Kieswetter said the revenue service has prepared educational material and would host webinars and seminars to help influencers understand their obligations.
“Sars is looking forward to working with this segment to provide clarity and certainty, but also to provide them with a seamless taxpayer experience,” Kieswetter said. “Sars is more than willing to assist honest taxpayers to comply with their tax obligations. I am reminding social influencers to uphold their end of the bargain.”
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